from the you-don't-own-what-you-bought dept

We've talked a lot about the end of ownership society, in which companies are increasingly using copyright and other laws to effectively end ownership -- where they put in place restrictions on the things you thought you bought. This is bad for a whole variety of reasons, and now it's especially disappointing to see that Tesla appears to be jumping on the bandwagon as well. The company is releasing its latest, much more high powered, version of autonomous self-driving car technology -- but has put in place a clause that bars Tesla owners from using the self-driving car for any competing car hailing service, like Uber or Lyft. This is not for safety/liability reasons, but because Tesla is also trying to build an Uber competitor.

We wrote about this a few months ago, and actually think it's a pretty cool idea. Part of the point is that it effectively will make Tesla ownership cheaper for those who want it, because they can lease it out for use at times when they're not using it. So your car can make money for you while you work or sleep or whatever. That's a cool idea.

But it's flat out dumb to block car owners from using the car however they want.

If Tesla wants to compete with Uber, that's great, but it should compete and offer a better deal for car owners, rather than artificially limiting what they can do. And the thing is, Elon Musk knows this. Remember, a few years ago when he famously freed up all Tesla patents into the public domain, recognizing that it was better to compete on execution rather than artificial legal limitations? So why not take that same approach with competing in car hailing services as well? Don't limit what owners can do with their cars. That's now ownership. ow they're just leasing.

Tesla's plan for a competing ride hailing service is a good idea, and I'm excited to see what the company does with it, but if it starts off by artificially blocking Tesla owners from using their cars on competing services, it makes me think that Tesla doesn't think it's own service will be very good, and therefor it needs to artificially lock Tesla owners into its own platform, rather than competing on the merits. That seems antithetical to the message that Tesla and Elon Musk have given off in the past. Hopefully Musk reconsiders this anti-consumer move and recognizes that Tesla can build such a service that can stand on its own merits without artificially restricting Tesla owners.

from the well-that's-interesting dept

Lyft just announced an interesting partnership with MARTA, the Metropolitan Atlanta Rapid Transit Authority to basically help get more people to and from MARTA stations. It's an interesting approach to try to help make public transit more convenient:

Partnering with transit agencies like MARTA is a core part of our vision to build a sustainable transportation network. By helping fill the first and last miles between a passenger’s home and a MARTA station, we’re making it easier than ever to ride transit. We believe that when transit is within reach of everyone, our cities are more liveable, connected, and prosperous.

Of course, it's not entirely clear what's really involved in the "partnership" beyond marketing. Yes, Lyft is offering discount vouchers, but only for 10 rides. And you could already use Lyft or Uber to do this without the partnership.

Where this potentially gets more interesting is the decision of Dublin, California, to look to Lyft and Uber as a substitute for public transportation by subsidizing rides via those companies instead of taking a bus.

In a first for California, a public transit agency next month plans to begin subsidizing fares of people who take private Uber and Lyft cars to local destinations rather than riding the bus.

Passengers ordering Uber or Lyft car trips within two test areas of Dublin will be eligible to get door-to-destination service at a big discount under a partnership between the ride-hailing companies and the Wheels public bus system in Dublin, Alameda and Pleasanton.

The local transit authority is even suggesting that this might change the way they set up routes and serve certain communities. In fact, they've already killed off one (little used) bus route, suggesting that this new partnership can help replace that route more efficiently.

I can see why this might annoy some people -- and certainly those who don't trust big private companies like Uber and Lyft are going to complain. Similarly the bus driver's union rep is apparently pissed off. But this is still a really interesting experiment. If it allows municipalities to truly offer better, more efficient transportation and it's cheaper overall, then is it really a problem that some companies might also make some profits from it? It will be interesting to see how this experiment in Dublin works out and if other cities follow suit. And it seems like a much better idea than what's happening in Massachusetts, where the government has instituted a special tax on Lyft and Uber... and giving that money to the taxi companies who didn't innovate.

from the not-cool dept

A month ago, folks in Austin Texas voted against a proposition that Uber and Lyft supported, concerning a number of new rules that would be put on ride hailing operations. Given that, both companies immediately shut down operations in Austin -- a city with over a million residents and only 900 cabs. In response, people are so desperate for rides that they're seriously trying to recreate the Lyft/Uber experience by using a Facebook group where people can post their location, negotiate a fee, and have someone pick them up (something that seems a lot more dangerous than typical Uber/Lyft).

DUI (driving under the influence) arrests have gone up by 7.5% compared to the previous year.

This does not mean that Uber/Lyft leaving is absolutely the cause, as there may be lots of other factors. But the anecdotal evidence certainly suggests it's having an impact. From the Vocative story linked above:

“The first Friday and Saturday after Uber was gone, we were joking that it was like the zombie apocalypse of drunk people,” Cooper said.

People were so desperate for rides, she said, that she’d pull up to a corner and pedestrians would offer to hop in her car as soon as they spotted her old Uber and Lyft emblems in the windshield. “They don’t even know who I am,” she chuckled in amazement.

Even more troubling than the late-night pedestrian concern is Austin’s rampant drunk driving problem—last year the city had more than 5,800 DWI arrests, according to police data. Back in December the city’s Police Chief Art Acevedo expressed concern for how an Uberless Austin would affect the road safety. “If we take away the (ride-hailing firms) here and in other cities, it definitely will impact DWI,” he said. “There’s no doubt about it.”

No matter what you think of Lyft or Uber, it's pretty clear that they're very, very useful services for lots of people -- and that includes drunk people who no one should want behind the wheel themselves. Putting in place regulations to limit those services seems to be backfiring, and hopefully it doesn't lead to loss of life either through drunk driving or less safe drivers making use of the informal Facebook groups.

from the not-helping dept

This century has produced a new lexicon that didn't exist a generation ago: Broadband. Apps. Connectivity. Streaming video. Social networks. The on-demand economy.

The new millennium has also produced a startling number of successful American companies with worldwide reach: Airbnb, Amazon, Facebook, Google, Lyft, Netflix, Pandora, Snapchat, Twitter, Uber, Yahoo, Yelp.

With so many American innovators leading and improving the global economy, it would seem natural for American policymakers to do everything possible to allow these companies to flourish. Instead, we see far too many examples of our politicians actively discouraging or burdening new services from the country's leading American companies. With good intentions, but flawed logic, politicians are jumping in to regulate these new companies, slowing the pace of innovation.

In July, Democratic New York Mayor Bill de Blasio was forced to table a plan to limit the growth of ride hailing companies like Uber and Lyft in New York after riders launched a public campaign to stop the proposal. Ride hailing services give New Yorkers and visitors access to quick, clean and affordable transportation options and help expand the city's economic growth by creating more job opportunities. So why are city regulators trying to slow their expansion and limit consumer choice?

Ride hailing companies continue to face pressure from courts and politicians who say drivers should be treated as employees rather than independent contractors. Labor unions are pushing this view, while ignoring that many ride hailing drivers are drawn to the flexibility of being independent contractors. (Meanwhile, taxicab drivers in many cities are also considered independent contractors, a fact that is rarely mentioned in these debates.)

On-demand economy services like Airbnb that link homeowners with those looking for places to stay are also under attack, as hotel unions join with the lodging industry to regulate, and in some cases ban, these services. The city of San Francisco is considering a measure that would cap Airbnb stays at 75 days, a move that Airbnb says will cost the city $58 million in tax revenue over the next 10 years. Why would city leaders seemingly ignore the potential good that immense amount of revenue could do?

Our nation was built on a foundation of freedom -- freedom to contract with each other for goods and services, freedom to innovate and create new products, freedom to start a new business and maybe even fail at it. The government should only impose itself on industry if there's a compelling public interest.

Rather than force new services to fit the framework of old rules, innovative startups offer regulators a chance to revise outdated rules to reflect a new reality. Ride hailing services naturally weed out bad drivers and poor service, especially when compared with the legacy cab drivers who aren't rated on or accountable for the quality of their service. Government can and should require driver screening and insurance, but it's the dynamic feedback nature of the wireless service that safeguards the public and benefits drivers.

Home-sharing services like Airbnb give users more options when they travel and provide extra income for homeowners. Government can and should collect hospitality taxes after some threshold of rentals, but cities benefit from the influx of tourism whether visitors stay in hotels or not. Recently, my family took a holiday in New York City, where Manhattan has few hotel options for families with children. Thanks to Airbnb, we rented an apartment for a third of the comparable hotel price.

Meanwhile, millions of Americans enjoy new services and experiences thanks to the ever evolving tech economy -- whether it's making a living from eBay or Etsy, figuring out where to eat or stay from Trip Advisor or Yelp, or enjoying new music from Pandora. Politicians need to get out of the way, let these businesses thrive and intervene only when there's a demonstrated, compelling need -- and even then, do so as narrowly as possible. The public is voting with their apps and their finger taps. Politicians would be wise to listen to the sounds of the page clicks. It's what their constituents want.

from the so-much-for-that dept

Earlier this week, we noted that NY City mayor Bill de Blasio appeared to pick a fight with Uber that he couldn't possibly win. The plan was to create a taxi medallion-like system for car hailing apps like Uber and Lyft, but which would cap the number of such cars that could be on the road. The PR campaign against this effort was tremendous (obviously, some of it pushed by Uber and Lyft -- but much of it by the happy users and drivers on those platforms). De Blasio and his staff apparently believed that there really wasn't popular support for these platforms, which was just wrong. As the negative publicity continued to mount, including having various celebrities weigh in on how stupid the plan was, it appears that de Blasio has backed down and agreed to drop the plan, at least for the time being.

The agreement brings a temporary end to a fractious struggle that had consumed City Hall for several days, and inundated parts of the city with mailers, phone calls, advertisements and even celebrity endorsements.

Under the agreement, according to three people familiar with the agreement, the city will conduct a four-month study on the effect of Uber and other for-hire vehicle operators on the city’s traffic and environment.

To save face, the mayor's office is also claiming that this is a "victory" because Uber agreed to share some data with the mayor's office about usage of the platform. However, this is pretty clearly a victory for Uber, its drivers and the people who use the service. There are some legitimate questions about how these companies operate and what they mean for the cities and residents where they exist, but this move, from the beginning, was clearly about paying back taxi cab companies who had supported de Blasio's election, rather than any legitimate concern for the city.

from the and-will-lose-big-time dept

NY City Mayor Bill de Blasio has apparently decided to pick a fight with Uber -- a move that has already backfired and appears to be getting worse by the day. He's been pushing a proposal, obviously put together in support of legacy taxicab owners, that would limit the number of such car-hailing drivers allowed in the city. Basically, it would take the ridiculous taxi medallion system and apply it to these new services, limiting supply, keeping prices high and not serving the public very well at all. Uber responded forcefully last week by adding an amusing "de Blasio" feature to its service, showing riders how much longer they'd have to wait for a car if the plan moves forward.

The story is getting more and more attention, and it's becoming clear that this has become personal for de Blasio, for reasons that are unclear. He can't win this fight and it's only making him look worse and worse. Not only that, but he is apparently threatening other "business" groups to "stay out" of the fight, threatening retaliation if they didn't stay away:

Mayor de Blasio bullied business groups to stay out of the Uber debate in the weeks leading up to the City Council vote this week on controversial bills to curtail new licenses for e-hail cars.

Deputy Mayor Tony Shorris called Partnership for New York City’s Kathy Wylde and the Association for a Better New York’s Bill Rudin to alert them to the bills — and to threaten them to stay on the sidelines, sources said.

“Their message is, ‘This isn’t your fight. Stay out of this and we’re not going to bother you,’ ” said a political source familiar with the outreach. The implication was that if the groups defied the mayor, City Hall would “limit your business opportunities,” he said.

City Hall doesn’t buy the notion that Uber is growing fast enough for a cap to disrupt the service.... And the mayor’s circle also doesn’t believe that Uber is broadly popular, or represents anything most New Yorkers care about.

“It’s a boutique side issue,” said a top City Hall ally. “There’s a small set of excited tech people who are reading Mashable and might think the mayor isn’t innovative enough.”

How can one be mayor of New York City and not realize that how people get around the city is a major issue to the public, and that Uber is increasingly one of the preferred ways of getting around. Furthermore, it appears that de Blasio's people are misreading their own data to argue that this cap on drivers makes sense.

And, of course, it's not just the riders that should concern de Blasio, but the many people now making a living as drivers for these various services.

When running for mayor, de Blasio got strong support from the taxi drivers -- and many are seeing this as his repayment of that debt. But, going against what the public wants -- especially when it comes to helping get people around more efficiently -- seems like a huge miscalculation on the part of de Blasio. Even for people who think that Uber's practices are problematic (and this move impacts all the other companies in the space as well...), it's hard to see de Blasio's move as anything but trying to raise prices and limit options for the public for no good reason at all.

from the corruption-index dept

Last year, we wrote about two key "corruption indicators" in city and state governments: they ban direct sales models to block Tesla from competing with traditional car companies and they ban Uber/Lyft style car hailing services to protect local taxi incumbents.

It appears that Texas is really trying to wave its anti-innovation flag as strongly as possible as the legislature down there failed to move forward on two key bills that would have made it possible for Tesla to do direct sales in Texas... and to stop local cities from blocking Uber & Lyft to favor taxi incumbents.

A Texas House deadline has come and gone, killing many top-priority bills for both parties — among them one that would allow Tesla-backed direct car sales and another to regulate ride-hailing companies. Midnight Thursday was the last chance for House bills to win initial, full-chamber approval. Since any proposal can be tacked onto other bills as amendments, no measure is completely dead until the legislative session ends June 1. But even with such resurrections, actually becoming state law now gets far tougher.

And, of course, this comes just after the FTC warned Michigan for its blocking of direct sales of cars like Tesla.

The failure to allow direct sales is a much bigger deal than the car hailing stuff, but both are bad. And the response from Texas politicians is really quite disgusting:

Rep. Senfronia Thompson — one of the House's most senior members currently serving her 20th term — said it was the company's own fault that the bill didn't pass.

"I can appreciate Tesla wanting to sell cars, but I think it would have been wiser if Mr. Tesla had sat down with the car dealers first," she said.

Really? In what world is it considered appropriate to force an innovative company that wants to go direct to consumers to first "sit down" with the gatekeepers that are trying to block them? "I can appreciate Amazon wanting to sell books to people, but I think it would have been wiser if Mr. Amazon had sat down with retail store builders first." "I can appreciate YouTube wanting to let anyone upload videos, but I think it would have been wiser if Mr. YouTube had sat down with TV producers first."

That's not how innovation works. At all. And thus, we can cross Texas off the list of innovative states.

The law around car hailing is not quite as big of a deal, but without the new Texas law, various cities within Texas can still create their own rules that would effectively make it impossible for such services to operate there. There are states that create spaces for innovation -- and then there are those that protect incumbents. Texas appears to be making it clear that it's the latter. If I were a startup in Austin, I might consider finding somewhere else to operate.

from the because-that's-how-innovation-works dept

Whatever you might think of Uber in terms of its attitude and practices (and, really, people feel this weird need to rant on about such feelings, but that's unrelated to the point of this post -- so no need to tell everyone), you can't really deny that it has truly revolutionized the way that many people are able to get around in a variety of metropolitan areas. And Uber and its various competitors have done this by building a better system that is much more convenient and easy to use, and actually using much more realistic market forces, rather than doing silly things like artificially limiting the number of taxi medallions to keep taxi services scarce and expensive.

Of course, the old beneficiaries of the system, have hit back any way they can. As we've written repeatedly, various cab companies and bureaucrats seem to go out of their way to attack such ride sharing services. The typical go-to claim from those hating on ride hailing services is that because they're less regulated, they're more subject to fraud and abuse or unsafe driving conditions. There is, however, little evidence to back that up. While there are some anecdotal stories of bad ride hailing drivers, we're already seeing innovative ways to deal with that. For example, in India, Uber recently added an emergency button to its app, which would directly alert police if a rider was in trouble.

In short, what we've seen is that, through innovation, competition and (most importantly) an abundance of information, a better overall result can occur. The reasons for many taxi regulations in the past was because of clear information asymmetry: taxi drivers could (and frequently did) screw over passengers, because there was basically no recourse. There was no way for a rider to know if the driver was safe or not, and (more importantly) no real way for that rider to then warn future passengers. But ride hailing services changed that in a big way by flipping the equation, and allowing a good way to rate drivers and to create incentives for those drivers to do a good job. It's not perfect, but, frankly, my own experience in using Uber and Lyft has been that the overall experience has been much, much better than using a traditional cab.

In New York City -- a place where cabs have long been limited by its famous medallion system -- there's been a struggle to deal with this innovative change. Just last year, we wrote about the Taxi and Limousine Commission declaring Lyft to be illegal. And, a few months ago, a NYC politician proposed a bill that would require the TLC to create its own Uber-like app. Because, apparently, innovation works by having the government mandate another part of the government copy an innovative company?

Either way, the TLC is now looking to go even further, in proposing new rules that say that basically any ride hailing app should be fully regulated by the NYC TLC and including a bunch of conditions that really don't seem necessary. Some of them just seem like relics from a previous era that are there because they were there in the past. It's difficult to see why that makes any sense. And then there are new requirements that also seem bizarre. Like this:

The website and/or smartphone application must provide Passengers, upon request, with an estimate of the total fare, inclusive of all fees and any price multiplier or variable pricing policy in effect, for the ride.

I can see how that would be a nice feature to have, but should it be required by the government? If Uber doesn't provide that and Lyft does, then isn't that just a competitive advantage for Lyft? And, really, do existing taxi systems already do that beyond a driver tossing out a random estimate off the top of his head on how much it will cost to go somewhere?

Then there's something really concerning: buried in the rules is the idea that drivers can only work for one provider at a time. I've seen many drivers that work for both Lyft and Uber (and sometimes others as well). Specifically, the rules have a "one device" rule -- saying drivers can only use a single device at a time, but many drivers that I've seen who work for multiple services have separate devices (and some, like Uber, will offer to rent you a special phone just for being an Uber driver, if you don't want to/can't use your own phone).

A Base Owner must not dispatch a For-Hire Vehicle that is equipped with more than one electronic device in addition to the dispatch equipment required by the Vehicle’s affiliated Base...

Again, I'm sure the TLC would argue that this is for safety reasons. Elsewhere in the document it suggests that by arguing that this single device cannot be handheld:

a For-Hire Vehicle may be equipped with one electronic device that is used to accept dispatches from a Base or FHV Dispatch Application, provided that that the device is mounted in a fixed position and not hand-held and use of the electronic device is limited to either voice or one-touch preprogrammed buttons or keys while the Vehicle is in motion.

And, sure, you can reasonably worry about the driving safety of someone who has multiple such devices, though I've seen plenty of drivers with two or three phones lined up in a way that seems perfectly reasonable.

The more glaring concern here, though, is that such a rule basically locks in the incumbents and harms the upstarts. If a driver can't drive for Uber and a new ride hailing startup, they're likely to just stick with Uber, and the upstarts get cut out. That's a problem. Even if that's not the intention, it's these kinds of regulations that all too often lock things in so that incumbents stay in power, while startups are blocked.

Furthermore, just the idea that any new service in this space has to now go and plead with the TLC to get "licensed" is going to slow and limit the opportunities for new and innovative players in this space. Uber got to where it was by building a useful service, not having to ask local bureaucrats for permission every time. The next generation of companies looking to reinvent the space won't be so lucky -- and that may mean we all suffer.

In denying the company's motion for summary judgment, Chen calls Uber out for the "narrow framing" of its "we're an app, not a company" assertions, but notes that Uber does grant its drivers enough leeway that the question cannot be completely resolved via a motion in his court. Chen also raises the spectre of further regulation -- something that's similarly unlikely to work out in Uber's favor.

The application of the traditional test of employment – a test which evolved under an economic model very different from the new “sharing economy” – to Uber’s business model creates significant challenges. Arguably, many of the factors in that test appear outmoded in this context. Other factors, which might arguably be reflective of the current economic realities (such as the proportion of revenues generated and shared by the respective parties, their relative bargaining power, and the range of alternatives available to each), are not expressly encompassed by the Borello test. It may be that the legislature or appellate courts may eventually refine or revise that test in the context of the new economy. It is conceivable that the legislature would enact rules particular to the new so-called “sharing economy.”

And then sends the case on its way to a jury trial, something he notes earlier is the only way to resolve an issue this complex. No precedent is set or will be set, at least not in Chen's court.

Until then, this Court is tasked with applying the traditional multifactor test of Borello and its progeny to the facts at hand. For the reasons stated above, apart from the preliminary finding that Uber drivers are presumptive employees, the Borello test does not yield an unambiguous result. The matter cannot on this record be decided as a matter of law. Uber’s motion for summary judgment is therefore denied.

This order disposes of Docket No. 211.

So, a case that has been running since August of 2013 may still be months away from a resolution. Uber's inability to get the suit tossed doesn't necessarily mean it's destined to become Yet Another Cab Company. It still has options, but it also has an uphill battle against plenty of incumbents… and the politicians who prefer what they know to unfamiliar market entrants.

from the the-gig-economy dept

Services like Uber and Lyft have been disrupting the taxi industry, and plenty more industries, too. In fact, they are the progenitors of a new and growing "gig economy". But what's it like to actually drive for one? Podcast co-host Dennis Yang has been trying his hand as a driver for both services, and in this episode he shares his experiences and sparks off a discussion about the future of this economy.